Six Free Ways to Become a Better Trader

What is the mark of a good trader? The question is one of Wall Street’s most oft-debated subjects. Is it a portfolio of high returns? Nerves of steel? Steadfast self-discipline? Luck? Everyone has an opinion.

At Benzinga, we believe that there is only one way to predict a good trader: those who are willing to work hard towards getting better will succeed. Prosperous trading is not an innate skill; it is learned.

For traders, skill development is not an option. With more expertise, traders can boost their profits in any market environment. Fortunately, there are vast resources available to help you become a better trader—none better than Marketfy and Benzinga Pro. If you are resourceful, there are numerous ways to develop your skills for free.

Here are Benzinga’s top six free ways to become a better trader:

1. Visit Your Local library

The best free resource for developing your trading skills is your local library. Your tax money pays for it—why not use it? Some of the trading books that Benzinga recommends are Mastering the Trade by John Carter, The Disciplined Trader by Mark Douglas, and Come Into My Trading Room by Alexander Elder.

2. Attend Webinars

Brokerages and trading platforms often offer free webinars, featuring leading market experts teaching new skills and strategies. Benzinga recently spoke to Mike Sedek, chief retail officer at online brokerage Lightspeed Trading. Sedek’s team is preparing for a webinar on Tuesday, November 27, dubbed Becoming a More Successful Trader. “People who apply the strategies that they learn in a webinar and see their portfolios grow will be more likely to sign up for a Lightspeed account,” figures Sedek. It’s a great deal for traders, who can learn tips that will boost their portfolio’s returns for free. From now until the end of the year, Lightspeed is offering commission-free trading.

3. Enroll in Open Source Finance Courses

A strong background in finance will be massively helpful for becoming a better trader. There are no excuses not to learn the intricacies of how markets work, as free online courses from some of the world’s best universities are abundant. Online education websites like Coursera, Academic Earth, and MIT OpenCourseWare are revolutionizing the level of access that people have to world-class educational content. To improve your financial knowledge, Benzinga recommends classes from prominent financial minds like Yale’s Robert Shiller and NYU’s Aswath Damodaran. Khan Academy is an excellent resource for more introductory level material on finance and economics.

4. Learn Everything about the Stocks You Follow

Good equities traders choose a handful of stocks to follow and learn everything about them: management, products, competitors, strategy, analyst estimates, financial statements, earnings guidance, inventories and risk factors. Traders need to internalize all of these dynamics in order to understand price movements and react to news. Fortunately, with enough digging, all of this important information is available for free in company annual reports and filings.

5. Paper Trade

Nearly all major brokerages offer free “paper trading” — stock trading simulation. It looks like a portfolio and feels like a portfolio, but users are trading fake money. By managing a portfolio without risking any money, paper trading accounts allow you to test new strategies or develop confidence in your trading.

6. Manage Your Emotions

Successful traders need to make sure that they trade methodically, not emotionally. Developing the discipline to stick to a strategy — without panicking in a downturn or irrationally buying in an upturn — is crucial. Richard Peterson, managing director of behavioral finance firm MarketPsych, told EFinancialNews in an August interview, “To be successful, short-term traders need to score low on the emotional scale. They need to recognize their emotions, but not let them affect their judgment. People who get stressed out easily tend to burn out. A certain amount of introversion is also useful, as that allows a trader to block out market noise.”